DMN3 Blog

If you are paying attention, you’ve probably noticed that traditional print sites are featuring more and more video stories. Here’s the reason…

In addition to the growth in quantity, video is also being given more prominence on these sites. We are seeing these sites evolve into video and print sites. Why?

Follow the money! The demand for video advertising on mainstream news and information websites is greater than the inventory of video stories available. The result of this supply imbalance is that news sites, in particular, are working to increase the number and prominence of video news clips on their sites.

A New York Times article, Online Ads Are Booming, If They’re Attached to a Video , (published November 10, 2009) discusses the video impact on online news sites. News and information sites accounted for almost 500 million video streams in September. While this is only a small portion of the nearly 26 billion video streams reported for the month, it is still a substantial number (see below). Many new sites are responding to the demand for online video advertising by shifting their focus to include more video clips on their sites. Obviously sites that already have a large video inventory are at an advantage. For instance, in September most of the streams occurred on MSNBC.com (162 million) and CNN.com (148 million).

While other types of online advertising are stagnating, digital video advertising continues to grow rapidly. While it makes up a small fraction of the overall $10.9 billion spent in the first half of 2009, the $477 million spent on digital video advertising represented a 38 percent boost from the same period a year ago, according to the Interactive Advertising Bureau.

This 38% growth should be viewed in the context that online advertising spending overall was down 5.3 percent for the same period. Newspapers, magazines and broadcasters saw declines from 12 to 29 percent.

Advertising is following the eyes of its publics as audiences are moving online and to digital video. Comscore announced that nearly 26 billion videos were viewed during September 2009 and more than 168 million U.S. internet users watched online videos during the month. You can view the full release here: TV Season Premieres Spur Continued Gains in Online Video Viewing as September Attracts Record Viewership

One example of a traditional print news organization adding a video focus is the Wall Street Journal (www.wsj.com). According to Brian Quinn, VP and GM of Digital Ad Sales for the Journal, video advertising is currently the strongest ad format. Pre-roll ads (shown before the actual content) rates have increased approximately 50 percent since last Fall, from $50 per one thousand impressions last year to $75 per one thousand impressions today.

The growth in the viewing of digital video streams over the Internet can be attributed to a number of trends:

• Near ubiquitous access to broadband Internet connectivity: As more and more homes are equipped with cable and DSL Internet connections, they are using that bandwidth to access more band intensive applications. Video is the major benefactor of this increase in bandwidth.
• Advances in video compression technology: Over the last few years we have witnessed the ability to transmit video over smaller bandwidths by better video compression algorithms. The result is the ability to transmit higher quality video and to view it in larger windows on computer monitors. 
• Changing viewing habits from synchronous (real time) to asynchronous (on demand): This has impacted the way viewers get their traditional television programming, especially news. People expect to view news and programming on their schedule rather than the schedule of the networks. This can be readily seen by the surge in streaming that takes place after major events.
• The emotional draw of television: Many users just prefer to view an online video rather than read a story about the same subject. The emotional impact is better realized via video.

Online video growth and its corollary, Digital Video Advertising, will continue to grow: eMarketer projects a 35 to 45 percent growth for the online video advertising segment for each of the next five years, reaching $5.2 billion by 2014.